In the past 2 months the market has been experiencing correction. Now it is wise to expect a bounce back on technical grounds.

Even if it bounces strongly, we cannot assume that the Nifty has reached the bottom. As explained in our last newsletter the market has been experiencing correction owing to the following factors:

The market is in the overheated bull market phase where valuations are not very attractive

BJP Government has not shown action in bringing back the real reforms

Fall of Euro may and several baskets of currency poses problem to the Earning growth for export oriented Indian companies

Hiking the interest rates by FED in US may suck the liquidity from the Indian market

Technical traders should simply sit on the sidelines and watch the following two aspects

the bounce back levels

the volumes associated with it

Market may slip below 8500 in the coming days. In the last two trading session we had witnessed a deep fall in mid and small caps stocks. Worst is yet to be over and at this stage we may witness panic bottom at any time. Some technical anlaysts expect the Nifty to touch 8000. As usual we will watch and inform you about the bottom in the coming days. But for now we should know that the correction is not yet over.